Statutory settlement procedure requires verification, reasons and hearing before rejection; procedural breach justified remand for fresh consideration.
Applications for settlement of arrears under the Tamil Nadu Settlement of Arrears Act, 2011 must follow the statutory process of self-computation by the applicant, verification by the designated authority, determination of payability under the relevant provisions, and refusal only after reasons and a reasonable opportunity are given. Where the authority departs from that procedure, the defect goes to the root of the matter and warrants interference. In this matter, the rejection orders were found to suffer from gross procedural violation, particularly where similar applications for other assessment years had been entertained without a stated basis for differential treatment. The orders were set aside and the matter was remanded for fresh consideration after personal hearing and an opportunity to produce books and records.
Issues: Whether the rejection of the settlement applications under the Tamil Nadu [Settlement of Arrears] Act, 2011 was vitiated by procedural violation, warranting interference and remand for fresh consideration.
Analysis: The applications under the settlement enactment had to be made with correct self-computation of the amount payable, followed by verification by the designated authority with reference to the relevant records. The statutory scheme requires the authority to examine the particulars furnished under Section 5, determine the amount payable under Section 6 read with Section 7, and, if necessary, demand further payment only within the limits prescribed by the Act. Refusal to settle arrears must also conform to Section 8 and be supported by reasons after giving reasonable opportunity. The impugned orders were found to have been passed in gross procedural violation of this statutory procedure. The defect was held to go to the root of the matter. It was also noted that identical applications for other assessment years had been entertained, and no reason was shown for treating the disputed years differently.
Conclusion: The impugned orders were set aside and the matter was remanded to the designated authority for fresh consideration after affording personal hearing and opportunity to produce books of accounts and relevant records.
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